[pavi]

Originally Posted by V.Narayan

Cost of 1 lire petrol*

Singapore ~Rs 128 equivalent
UK ~ Rs 120 equivalent
South Africa ~Rs 88 equivalent

Delhi Rs 79 !!! - it will vary by State

* current prices at current exchange rates

Does this only show Indian rupee is weaker when compared to their currency? If the rupee drops to new low levels I think by the above logic the government can even state that we have the least price for petrol in the whole world. Consider the average income of Singapore and the whole equation collapses. As everyone of us know it is not the price of the commodity (which is actually reduced to more than half level) that makes the fuel cost in India higher but it's the tax. Then I think the 'exasperation' is very much justified.

[V.Narayan]

Originally Posted by swissknife

I don't think one can compare without factoring the incomes in each of the countries listed. What can the cost of one liter of fuel buy in each of these counties?

The price of an internationally traded commodity will within a range [before taxes] be similar in most developed/large economies. It is not determined or influenced by the per capita income of those countries nor can the Govt of India afford to subsidize the cost of petrol. Not quite sure what point you are making. It is like complaining about the cost of gold.

To the point @Pavi is making the prices indicate the other countries tax petrol even more. Argue if you wish to but request that the basics of economics and pricing and FX exchange rates be understood.

If we wish to be in the top 5% or 10% of India's consumption scale then some things like petrol, gold, and fancy footwear will cost appropriately. There is no sane reason for the Govt not to tax petrol fully. In the 1970s when petrol prices skyrocketed for the first time middle-class and upper middle class drove less and took the bus more often. It was a very real trend then for several years.

[jetsetgo08]

The difference between diesel(Rs.76.86/L) and petrol(Rs.80.22/L) is approx. Rs.4. in Hyderabad from what was close to Rs.8 six months ago I didn't realize it all this while. But, now it may not make sense in buying a new diesel vehicle in Hyderabad.

[Mr.Beat]

I think pertrol is now cheaper in Goa than diesel by a big margin. Who will buy diesels now ?

[Miyata]

A graph sourced from Livemint -



In comparison to all our neighbors, we pay the most for fuel!

I guess for most of us, even if the prices were to double tomorrow, our driving schedule and automobile use will continue to remain very similar. What would be more comforting - to get some transparency and accountability on what's happening to all that massive amounts we continue to pay in taxes.

[shankar.balan]

Originally Posted by pavi

Does this only show Indian rupee is weaker when compared to their currency? If the rupee drops to new low levels I think by the above logic the government can even state that we have the least price for petrol in the whole world. Consider the average income of Singapore and the whole equation collapses. As everyone of us know it is not the price of the commodity (which is actually reduced to more than half level) that makes the fuel cost in India higher but it's the tax. Then I think the 'exasperation' is very much justified.

France: Last week: 1.4 Euro a litre of Petrol. 1.6 Euro a litre of Diesel. Therefore the Yellow Jacket Strike.
So in Comparison, India is still cheaper.
Hence am not cribbing too much on this aspect.

[sunilch]

Originally Posted by sunilch

Oil is not the only cash cow that the Central Government has. It is a major one for sure but the Central Government has a mixed bag of sources of income. It is a very critical source for most State Governments though, apart from taxes on alcohol.








Fuel in India is the most expensive since many years according to a global study conducted by Bloomberg every year. Expensive w.r.t. to the per capita income. In literal terms, I believe it is the most expensive in Switzerland but their per capita income is very high - keeps moving between top 3 spots.

The said index is called 'Pain-at-Pump' by Bloomberg.

Source: https://www.bloomberg.com/graphics/gas-prices/

Re-posting my earlier post from some time back on the same thread. Seeing too many arguments that are creating the picture that fuel in India is 'cheaper' than other nations. IT IS NOT. INDIA is where fuel is the most expensive commodity w.r.t our average ability to pay for it.


As stated earlier, the only solution is to actually consume less of it. Just demand better infra, make use of alternatives where ever possible, demand development of better alternatives too. Else just pay the way we have been doing. Our government knows how much we have are addicted to it. Simple example - people rely on generators (as posted by someone on this very same thread earlier), rather than demanding better electricity availability from the government. The economics of the diesel works out to be better than trying for better infra I suppose.

[pavi]

Originally Posted by sunilch

Re-posting my earlier post from some time back on the same thread. Seeing too many arguments that are creating the picture that fuel in India is 'cheaper' than other nations. IT IS NOT. INDIA is where fuel is the most expensive commodity w.r.t our average ability to pay for it.

One simple reason for such comments had been said by Jonathan Safran Foe “It's always possible to wake someone from sleep, but no amount of noise will wake someone who is pretending to be asleep.”

[Hayek]

Originally Posted by sunilch

Re-posting my earlier post. Seeing too many arguments that are creating the picture that fuel in India is 'cheaper' than other nations. IT IS NOT. INDIA is where fuel is the most expensive commodity w.r.t our average ability to pay for it.


As stated earlier, the only solution is to actually consume less of it.

You can repeat the same argument a million times but that fact is that the price of a global commodity has nothing to do with purchasing power parity or ability to pay. And given the adverse environmental and fiscal consequences of using fossil fuels, the fact that Indian prices are below those in Europe shows we don’t tax fuels enough. The so called inflationary consequences of fuel price hikes have been amply debunked as well. Agree with your last point - the only option is the consume less fuel. And the best way to achieve that goal is to raise taxes on fuels further. The next government should aim to take taxes on fuels to at least ₹75 per litre.

Originally Posted by pavi

One simple reason for such comments had been said by Jonathan Safran Foe “It's always possible to wake someone from sleep, but no amount of noise will wake someone who is pretending to be asleep.”

Aptly said.

[lurker]

Frankly citizens of this country should demand a white paper from political parties who stand for elections on what exactly is going to be their fuel pricing policy. Until now we have seen everyone follow same route of shedding tears for commons while in opposition and continuing same taxation policies after coming to power and adding to already substantial taxes by means if cess etc.

Common folks do not have the multi-million rupee/dollar incomes that can indulge the govt in such taxation fantasies and simultaneously drive 200bhp 'diesel' cars on saturday nights. So we are talking of a large gap in pain threshold of both segments here. And I doubt those batting for 'highest taxes in petrol' are able to understand the issue from a less financially endowed commoners perspective.

My solution to this crisis is to take the bureaucracy and politicians to task and demand to include in their manifesto what their fuel pricing policy is going to be. The manifesto of an aspiring political party that comes to canvass your vote should clearly include their pricing structure at current crude levels and also at higher and lower crude prices. And deviation from this pattern can make them in violation of their pre-electoral contract with the voter and their election can be challenged in courts and election conmission.

Secondly people with limited means should take recourse to electric vehicles in big way as a means of avoiding bankruptcy and I feel govt is lagging on providing facilities to electric vehicles such as more charging stations etc since fuel is such a big cash cow. People need to find a way to beat this trap.

[vharihar]

Originally Posted by Hayek

You can repeat the same argument a million times but that fact is that the price of a global commodity has nothing to do ... Agree with your last point - the only option is the consume less fuel. And the best way to achieve that goal is to raise taxes on fuels further. The next government should aim to take taxes on fuels to at least ₹75 per litre.

I'd agree with you. But the thing to note is that the reason such a high taxation scheme works in Europe but may not work in India as *yet*, is likely bcoz they have an excellent public transportation system in most European countries, that residents can fall back on instead of using their pvt transport.

In India, public transportation infrastructure (which BTW, is not limited to just good buses and trains; rather it includes the entire ecosystem, such as good footpaths, skywalks, etc) is woefully inadequate in most cities, barring probably Mumbai and Delhi to some extent.

[Miyata]

Originally Posted by vharihar

thing to note is that the reason such a high taxation scheme works in Europe but may not work in India as *yet*, is likely bcoz they have an excellent public transportation system in most European countries, that residents can fall back on instead of using their pvt transport.

In India, public transportation infrastructure (which BTW, is not limited to just good buses and trains; rather it includes the entire ecosystem, such as good footpaths, skywalks, etc) is woefully inadequate in most cities, barring probably Mumbai and Delhi to some extent.

My very thought. Could not edit out anymore to lessen the text in quote for my reply!

Most of these countries have higher taxation by a strategic design and sound planning where they have covered all bases in aspects related to these basic needs of transportation and commute [driving, cycling, walking, public transport, roller-blade skating, etc].

They pay taxes, receive appropriate service and experience, everyone's good.

Out here, we pay taxes, but services and experience is missing! In some ways it is exactly like those horror e-commerce (flipkart or any other) scenarios where one has paid for the product that isn't delivered or one has received a fake - Caveat emptor all over.

In the e-commerce case, we could at least learn a lesson and move on to being careful and less-duped in the future, but in this scenario we are perennially stuck with the proverbial short end of the stick!

[Mohan Mathew A]

Originally Posted by V.Narayan

The price of an internationally traded commodity will within a range [before taxes] be similar in most developed/large economies.

That's true. But I thought it was clear by now the objection is to the tax and not on the underlying commodity. Also it is not just the top of the heap, 5 to 10%, who consumes fuel. The vast majority of the country uses it directly or indirectly. Autorickshaw fares, bus fares, all of these go up and has already in some places. All of these affects the common man the most as a proportion of their income. Comparing fuel prices (or the taxes associated, since crude price is more or less the same) to Singapore or UK is not appropriate, a more appropriate sample would be countries in the neighborhood who also import most of the oil and who have similar income levels. Taxes are always supposed to consider the average income and spending capacity of the target group and appropriately adjusted. Isn't that the reason for having a multi tiered GST. Since it is difficult to tax fuel differentially, to maintain a reasonable price, the government has to appropriately adjust tax. They increased it when prices dropped but are being very reluctant to drop it and the fuel companies are taking a cue from the government (in dropping prices).

[V.Narayan]

Originally Posted by Mohan Mathew A

Also it is not just the top of the heap, 5 to 10%, who consumes fuel. The vast majority of the country uses it directly or indirectly. Autorickshaw fares, bus fares, all of these go up and has already in some places. All of these affects the common man the most as a proportion of their income.

Agree with you. Good point.

That's true. But I thought it was clear by now the objection is to the tax and not on the underlying commodity.

The best answer is from Hayek. I quote below

Originally Posted by Hayek

You can repeat the same argument a million times but that fact is that the price of a global commodity has nothing to do with purchasing power parity or ability to pay. And given the adverse environmental and fiscal consequences of using fossil fuels, the fact that Indian prices are below those in Europe shows we don’t tax fuels enough.

Originally Posted by Mohan Mathew A

Comparing fuel prices (or the taxes associated, since crude price is more or less the same) to Singapore or UK is not appropriate, a more appropriate sample would be countries in the neighborhood who also import most of the oil and who have similar income levels.

I would be interested to see the prices in comparable poor to mid-income countries who import most of their oil. So here goes:-

Data as for 19th November in USD per litre at exchange rate on that day

0.73 Pakistan
0.99 Vietnam
1.03 Philippines
1.06 Bangladesh
1.09 Thailand
1.12 India
1.12 China
1.15 Kenya
1.22 Turkey
1.28 Jamaica
1.72 Zambia

I looked at data of 162 countries and India and China are in position 86! Exactly in the middle. Pakistan at $0.73 / litre is an indicator of our taxation but we do not know how much they import from Iran at (probably) cheaper rates. But fuel is a major source of revenue for our State Govt's and taxation on it isn't going away to appease citizenry of the upper middle class and above layers.

The arguments of 'what does the Govt give back to us' count as laments of a free country in my view. While I share your frustration with the bureaucracy a country where the Govt does not function looks like Zimbabwe or Pakistan or Syria.

Agree with your last point - the only option is the consume less fuel. And the best way to achieve that goal is to raise taxes on fuels further. The next government should aim to take taxes on fuels to at least ₹75 per litre.

Thank you Hayek. +1 to that.

[ramzsys]

Riots in France makes me wonder, whether we got the energy in us for a people's revolution(when did we have one, in the first case?)

There was a destructive cyclone that crossed TN coastline; two days later when essential services weren't restored, the common man resorted to violence.

So why isn't that happening around in my part of the country if the fuel prices are 'felt' to be insanely high? Farm laborers are buying pulsars instead of kitna deti hain 100cc bikes, so either economy is doing good and/or fuel prices aren't a bother.